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TMI Blog2022 (11) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... e been removed. 4. One of the defect pointed out by the Registry relates to deposit of the mandatory amount under Section 35F of Central Excise Act, 1944 as made applicable to Service Tax matters by Section 83 of the Finance Act. 5. The appellant has filed a miscellaneous application for waiver of pre-deposit mentioning therein that because of financial crunch the appellant is not in a position to make the deposit. 6. Section 83 of the Finance Act, 1994 provides that the provisions of section 35 F of the Central Excise Act shall apply in relation to service tax as they apply in relation to duty of excise. 7. Section 35 of the Central Excise Act, as amended on August 06, 2014, deals with deposit of certain percentage of duty demanded or penalty imposed before filing an appeal is reproduced below: Section 35F. Deposit of certain percentage of duty demanded or penalty imposed before filling appeal. - The Tribunal or the Commissioner (Appeals), as the case may be, shall not entertain any appeal, - (i) under sub-section (1) of section 35, unless the appellant has deposited seven and a half per cent. of the duty, in case where duty or duty and penalty are in dispute or penalty, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellate Tribunal could not have granted waiver of pre-deposit beyond the provisions of the Act. The relevant portion of the judgment of the Supreme Court is reproduced below: "7. Section 18(1) of the Act confers a statutory right on a person aggrieved by any order made by the by the Debts Recovery Tribunal under Section 17 of the Act to prefer an appeal to the Appellate Tribunal. However, the right conferred under Section 18(1) is subject to the condition laid down in the second proviso thereto. The second proviso postulates that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal fifty per cent of the amount of debt due from him, as claimed by the secured creditors or determined by the Debts Recovery Tribunal, whichever is less. However, under the third proviso to the sub section, the Appellate Tribunal has the power to reduce the amount, for the reasons to be recorded in writing, to not less than twenty-five per cent of the debt, referred to in the second proviso. Thus, there is an absolute bar to entertainment of an appeal under Section 18 of the Act unless the condition precedent, as stipulated, is fulfilled. Unless the borrower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the said Section. At best, the Appellate Tribunal could have, after recording the reasons, reduced the amount of deposit of fifty per cent to an amount not less than twenty-five per cent of the debt referred to in the second proviso. We are convinced that the order of the Appellate Tribunal, entertaining appellant's appeal without insisting on predeposit was clearly unsustainable and, therefore, the decision of the High Court in setting aside the same cannot be flawed." (emphasis supplied) 10. The principles laid down in the aforesaid decision of the Supreme Court in Narayan Chandra Ghosh were reiterated by the Supreme Court in Kotak Mahindra Bank Pvt. Limited vs. Ambuj A.Kasiwal & Ors [Civil Appeal No. 539 of 2021 decided on 16.02.2021]. 11. In Chandra Sekhar Jha, the Supreme Court noted that the Tribunal had rejected the appeal filed under section 129A of the Customs Act for the reason that the appellant had not complied with the requirement of pre-deposit under section 129E of the Customs Act. Though the contention of the appellant that the provisions of section 129E of the Customs Act as it stood prior to 06.08.2014 should be applied, was rejected by the Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no question whatsoever of the waiver of predeposit. As stated hereinabove, the statue itself has waived 90% or 92.5% of the duty amount, as the case may be, assessed by the authorities under the Customs Act, 1962. The petitioner- assessee has to deposit only 7.5% or 10% (as the case may be) of the duty assessed. Thus, there is no question of further waiver of the amount which is required to be deposited under Section 129E of the Customs Act, 1962." (emphasis supplied) 13. A Division Bench of Delhi High Court in M/s Vish Wind Infrastructure LLP v/s Additional Director General (Adjudication), New Delhi [Writ Petition (C)2178/2019 decided on August 28,2019] examined the provisions of section 35F of the Central Excise Act, 1944 which are pari materia to section 129E of the Customs Act and held that every appeal filed before the Tribunal after the amendment made in section 35F of the Excise Act and section 129E of the Customs Act on 06.08.2014 would be maintainable only if the mandatory pre-deposit was made. In coming to this conclusion, the Division Bench relied upon the judgment of the Delhi High Court in Anjani Technoplast Ltd. v/s Commissioner of Customs [2015(326) ELT 47 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Writ Petition that had been filed against the order of the Tribunal dismissing the appeal for the reason that the required pre-deposit was not made. The contention that was advanced before the Tribunal and before the Madhya Pradesh High Court was that the appellant was not in a position to make the pre-deposit due to financial constraints. After examining the provisions of section 129E of the Customs Act, the Madhya Pradesh High Court observed as follows:- "The aforesaid statutory provision of law makes it very clear that it is mandatory for an appellant to deposit seven and a half percent of the duty demanded or penalty imposed or both. The petitioner has not deposited a single rupee and in those circumstances, keeping in view the provisions of section 129E, the appeal itself has been dismissed. This Court after careful consideration of the aforesaid judgments is of the opinion that section 129E does not empower the Tribunal or the Commissioner (Appeals) to waive the pre-deposit or to reduce the pre-deposit , this Court is also not inclined, keeping in view the aforesaid statutory provisions of law to waive or reduce the pre-deposit and, therefore, no case for interference ..... X X X X Extracts X X X X X X X X Extracts X X X X
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